AGA, NRDC: Combating Global Warming with Increased Energy Efficiency Is A 'Win-Win'

May 29, 2008 // Published as a news service by IHS

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The American Gas Association (AGA) and the Natural Resources Defense Council (NRDC) joined forces to highlight the importance of energy efficiency in combating global warming.

AGA and NRDC issued a statement calling for coordinated incentives, government standards and regulatory reforms that would increase energy efficiency and reduce greenhouse gas emissions throughout the U.S.

AGA and NRDC have been working together to promote energy efficiency since 2004.

That summer, the organizations issued a statement encouraging state public utility commissions to consider innovative proposals promoting energy efficiency and conservation in a manner that would benefit both customers and shareholders.

The original AGA/NRDC proposal was called "revenue decoupling" and was designed to break the link between utilities' earnings and their customers' energy consumption. In 2004 few states had adopted revenue decoupling.

Today, 26 natural gas distribution utilities in 13 states have implemented revenue decoupling programs that serve 20 million residential customers.

This year's statement maintains support for revenue decoupling but also advocates for performance-based mechanisms which provide economic incentives for utilities to promote energy efficiency. The statement emphasizes joint support for efficiency standards and tax incentives at the state and national level.

According to AGA, the goal is to accelerate improvements in every sector of the economy, including contributions to the enactment of cost-effective efficiency standards and tax incentives, consumer education and marketing programs designed to increase home energy efficiency and reduce consumption.

The concept of earnings opportunities linked to energy efficiency is at an early stage; however, the end result should be a win-win solution for natural gas utilities and their customers, said AGA.

Among fossil fuels, natural gas has the fewest greenhouse gas emissions. Natural gas homes and appliances are increasingly efficient and produce fewer emissions. The average household today uses 32% less natural gas than it did in 1980, said AGA.

"Energy efficiency provides a clear path forward as consumers pay higher and higher energy bills and are facing difficult choices between food, gas for their car, or heating and cooling their homes," said Ralph Cavanagh, co-director of the NRDC Energy Program.

"We and the nation's hometown natural gas utilities are united in a determination to get more work out of less energy, and to create performance-based incentives that not only encourage utilities to reward customers to be more efficient but also have the added benefit of reducing global warming pollution.

"Making energy efficiency financially attractive for utilities and customers alike is the best way to cut energy bills and curb global warming, at a time when definitive action is needed for both."

Source: American Gas Association (AGA).